Date:07/01/2007 URL: http://www.thehindubusinessline.com/2007/01/07/stories/2007010702110200.htm

Back Damodar Valley plans forays into coal mining, power distribution

Our Bureau

Kolkata , Jan. 6

Damodar Valley Corporation (DVC), which is undertaking a massive expansion programme to create additional 7,000 MW power generating capacity in the next few years, plans to diversify into power distribution and coal mining through joint ventures.

While it is negotiating with Coal India Ltd (CIL) for joint venture coal projects within the country and abroad, it will shortly float a global tender inviting expressions of interest (EoIs) for a partner in the joint venture power distribution job to be undertaken at Jharkhand.

The DVC Chairman, Mr A.K. Barman, told newspersons recently that the company's current generation capacity of about 2,800 MW would be augmented by 1,000 MW in 2007-08 and by another 6,000 MW during the 11th Plan, entailing a combined investment of about Rs 20,000 crore.

The generation capacity in 2011 would thus be around 10,000 MW.

Mr Barman said that of the total projected investment, about Rs 6,000 crore would be arranged from internal sources and the rest would be organised as loan.

On the proposed foray into coal mining and power distribution, he said that DVC was apprehensive about fresh coal linkages from the CIL mines to meet its requirement when its generation capacity would touch 10,000 MW.

This was why it intends to develop coal mines jointly with CIL for its captive consumption purposes.

He indicated that it would require over 45 million tonnes (mt) of non-coking coal a year against current annual requirement of about 11 mt.

Although DVC's current coal requirement is met from the linked CIL mines, it has plans to import about 100,000 tonnes of coal in the last quarter of the current fiscal on an experimental basis.

It plans to import a substantial quantity of coal from 2007-08 onwards.

Meanwhile, the corporation has applied for a few more virgin coal blocks for captive consumption purposes and has also sought fresh coal linkages to ensure uninterrupted supply of right grade of non-coking coal.